iShares Global Clean Energy ETF (ICLN)

Enphase and SolarEdge face short-term headwinds from unfavorable regulations and higher rates, but long-term structural tailwinds remain strong. Both companies are innovating with distributed energy solutions—AI, battery storage, microgrids, and EV integration—positioning themselves as future leaders in energy distribution. Long-term drivers, such as electrification, rising electricity demand and prices, declining battery costs, and the decentralization of energy networks could significantly boost growth and resilience.

Key Points in This Article: Bill Gates' investing philosophy emphasizes stability, quality, and long-term value, drawing from the investment approach of his major charitable trust, the Bill & Melinda Gates Foundation Trust.

The Big Beautiful Bill boosts defense, industrials, and manufacturing, but healthcare and some REITs face headwinds from Medicaid cuts and policy shifts. AI optimism and the new legislation are fueling a broad market rally, but I question if AI stocks are outpacing their earnings, signaling a potential bubble. The Magnificent 7 era is over; META, MSFT, NVDA, and AMZN are the new leaders, while AAPL, GOOG, and TSLA face unique challenges in the AI race.

Upgrading ICLN to a buy as clean energy outperforms global benchmarks and technicals show a bullish breakout. Valuation is attractive at 14.4x P/E and a PEG ratio of 1.35x, with positive macro tailwinds like rising oil prices and a weaker dollar. ICLN remains high-risk due to volatility and cyclical exposure, but liquidity and portfolio diversity are solid strengths.

It's a distressing time for the climate industry in the U.S. as the current administration attempts to erase decades of energy transition progress. However, despite political pressure and related negative sentiment, the fundamentals for renewable energy keep it relevant in an age of increasing AI demand.

The surge in artificial intelligence (AI) is transforming global energy markets, driven by the relentless electricity demands of data centers powering AI operations. These facilities require high-voltage, ultra-reliable power to ensure uninterrupted performance, as even a fleeting outage can derail complex computations, forcing operators to restart tasks from scratch.

Donald Trump commences his second term by enacting a series of executive orders. The actions are poised to create winners and losers across different industries.

Trump's pro-AI stance will drive massive electricity demand, benefiting both fossil fuels and renewables, contrary to market fears. AI's energy needs will require significant investment across all energy sources, with renewables seeing substantial growth. Market overreaction to Trump's election presents a buying opportunity in clean energy stocks like HA Sustainable Infrastructure.

The global energy transition is driving massive investments in renewable energy, benefiting companies from various areas of the energy industry. Areas such as grids and storage are crucial to the success of the energy transition. At the same time, the focus is also on the modernization and flexibilization of the energy infrastructure.

The shift towards solar and wind energy is on track in many Western Europe countries, India, and China. However, these projects might get derailed in the US. Interest rate differentials indicate that the US dollar will likely continue to strengthen against major currencies in 2025. This is not good for iShares Global Clean Energy ETF. ICLN's stock price has steadily corrected since the spike during the pandemic. The implied P/E multiple is now close to the pre-pandemic level.

Last week, I moderated two panels on real assets and infrastructure for completely different sets of panelists and audiences. Despite the differences, there were many similarities among the two panels.

Despite its consistent underperformance, the iShares Global Clean Energy ETF is one of the most popular thematic ETF's with an asset base of 2Bn USD AUM. Investors in the fund are not only exposed to the wind and solar industry, but a range of other risk factors, as well as size and style bias. Even with record public funds financing the transition to clean energy, the fund's portfolio construction might not make it a targeted enough investment to participate in this theme.

The energy sector is rapidly evolving, driven by the relentless expansion of energy-hungry data centers and the accelerating adoption of electric vehicles (EVs). These technological advancements fuel an unprecedented surge in energy demand, creating a pressing need for cleaner and more sustainable energy sources.

The "misery index" shows that Americans are less dissatisfied with the sitting party. This should help Harris secure a victory in this presidential election.

The invention of clean energy has given many hope that it could be a future solution to nonrenewable energy sources and less pollutant energy production. Yet, the reality remains that each year the federal government spends billions of dollars to subsidize the industry.

Lots of things are happening all at once: economic weakening, rising odds of Fed rate cuts, and political chaos.US manufacturing output and employment increased until the 2018 tariffs took effect.